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Dayton defends veto of GOP-sponsored tax bill

Gov. Mark Dayton and DFL legislative leaders traveled the state Tuesday to trumpet their efforts to create jobs during the 2012 session by passing the Vikings stadium bill and the bonding bill.

But Republicans were calling Dayton a "job killer" for his veto of a tax bill that they designed to help small businesses.

Back in February, Dayton used his State of the State speech to propose what sounded at the time like a simple formula for creating jobs during the 2012 session.

"Let's take your best ideas and my best ideas and turn them into jobs, and let's do it now," he said at the time.

But four days after the end of the session, those words were ringing hollow for one key legislator.

"Completely disingenuous. Completely disingenuous. I believed the governor," said Rep. Greg Davids, R-Preston, chair of the House Tax Committee.

He was still feeling the sting from Dayton's veto of the omnibus tax bill that lawmakers passed in the closing hours of the session. He said neither he nor his Senate counterpart ever got a chance to talk to the governor about the bill.

The package of tax breaks included a one-year freeze on business property taxes, an upfront sales tax exemption for business equipment purchases and increased tax credits for small business investment. There were also a dozen local economic development projects in the bill. Republicans said it was their priority measure, and Davids said the governor should have signed it.

"He really blew it on this veto. He got some really bad advice. I'll bet you he wishes he had a do-over on this one, because as he looks at it closer, he really messed up by vetoing the tax bill. It was a big mistake," Davids said.

Dayton said the GOP tax bill had the same fiscal defects as an earlier version, which he also vetoed. He opposed dipping into state budget reserves and increasing future deficits in order to pay for the tax breaks. Dayton said he tried repeatedly to reach a tax bill compromise with Republicans, but they "did their own thing."

"If there's a lesson to be learned from this it's when we ... cooperate and collaborate, things get signed," Dayton said. "When somebody goes off on their own, just does it their own way without any regard for anyone else's input, it's not going to be as successful."

Dayton said there were some good features in the tax bill that he was willing to support. But he accused Republicans of sacrificing those provisions in order to make political hay over a veto that they knew would come.

Dayton is ready to make some political hay too. He's not on the ballot this fall, but all 201 legislative seats are. Dayton said after two-years of divided government he wants to help elect a DFL majority in the House and Senate.

"Go back to my tax proposal, raise taxes on the wealthiest 2 percent. The polls showed 65 [percent] to 70 percent of the people agreed with that," Dayton said. "But the Republicans ignore it. The Democrats won't."

If a shift to DFL control doesn't come, Davids predicted that Dayton will face even less cooperation from Republicans next session. Davids said trust and goodwill are now gone after the tax bill veto.